Lean Analytics

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by Foti Panagiotakopoulos Founder at GrowthMentor

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Lean analytics is a way of approaching startup building that aims to achieve the lean startup model—namely, being scalable, sustainable, and repeatable. 

Here, we’ll be taking a look into this concept, so that you can start to apply it to your own business.

What Is Lean Analytics?

Lean analytics falls under the umbrella of the lean startup approach. This approach sees the startup founder’s primary concern as finding the overlap between the customer, the problem they will pay you to solve, and the solution they will pay for.

The cycle that helps achieve that is:

  1. Build something small that users can try.
  2. Collect data about the experiences and behaviors.
  3. Adjust your course accordingly.

Lean analytics applies to steps two and three.

Lean analytics is not a set of metrics. You choose the metrics that will bring you closer to your business goals. It recommends ratios because they are understandable, comparable, and easier to act on.

The lean analytics cycle. 

The 5 Stages of Lean Analytics

According to the book Lean Analytics by Yoskovitz and Croll, businesses should build products in the following stages:

  1. Customer Empathy: Making sure your product actually solves a problem for your target market. What are their real needs?
  2. Stickiness: Making sure your target market will keep using your product. What is the retention rate? How often do users come back? Why do users leave?
  3. Virality: Getting users to invite other users. What will incentivize people to spread the word? Is our onboarding process effective?
  4. Revenue: Monetizing your user base. How much are users willing to pay?
  5. Scaling: Increasing acquisition and retention rates while maintaining profitability.

According to Yoskovitz and Croll, going through these stages in order is incredibly important. If you move into the scaling stage when your product hasn’t been tested for stickiness, you might see a quick increase in users that falls equally quickly.

Example of Lean Analytics in Action

In lean analytics, every decision is a hypothesis that must be tested (e.g., “By changing X, I believe Y will happen”). 

To illustrate, let’s look at an example of a food delivery app:

StageHypothesisTesting Method
EmpathyI think a food allergy filter is something that my users are missing with competing food delivery apps.Feature request poll.
StickinessI think a monthly paid membership that offers free delivery will keep people coming back.Beta test +  user feedback forum.
ViralityI think free delivery credits will be enough incentive to increase referralsBeta test + referrals and signup tracking.
RevenueI think users would be willing to pay a service fee that’s 5% higher.A/B test + order volume tracking.
ScaleI think I’ve found a sustainable business model with enough differentiation to last.Tracking analytics (growth, retention, acquisition, etc.)

Start Practicing Lean Analytics at Your Company

Lean analytics are designed to grow your company quickly and sustainably by following a logical series of stages.

If you’re looking for more personalized advice about building a startup, Growth Mentor can help. Members can book unlimited calls with over 400 talented mentors and coaches who have the skills and experience to steer you in the right direction. 

Suggested mentors to help you make sense of Lean Analytics

Morgan Schofield

Head of Ecosystem Growth

I help Web3 companies grow their business and communities. I’m a data-driven, technical marketer with $10m+ spent and 8+ years experience across SEM, SEO, SMM, CRO & CRM. Growing blockchain companies since 2012. Previously; Director of Marketing at Salad 🥗, Head of Growth at Reality Gaming Group 🎮

Alicia Burke

Head of Product and Marketing @ GrowCFO

I lead marketing and product for a finance leader and CFO community. I’m used to working with lean teams & budgets and can help you with campaign planning, organic social & content marketing, comms, branding & web dev.

Michael Taylor

Co-Founder @ Vexpower | Marketing Memeticist | Ex-Founder @ Ladder

Data-driven, technical marketer with 11 years experience, 8,000 experiments run, and $50m optimized across all 4 major growth channels. Author of Marketing Memetics, Co-Founder at Vexpower, Ex-Founder at Ladder.

Kuba Nowak

Data-Driven Growth for 💻 SaaS 🤝 Marketplace 📱 Mobile Apps 🛒 eCommerce 📈 Growth Strategy 🎏 Experimentation Consulting

I’m focused on building strategic and sustainable growth machines where Acquisition, Retention, and Monetization are considered across Marketing & Product, and Experimentation, User psychology, and Data are leveraged in the decision-making process.

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